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Understanding Legal Battles


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Understanding Legal Battles

After struggling for years to wrap my head around the legal drama in the news, I was faced with a pretty big challenge of my own. My son was accused of a crime that he swore he didn't commit, although I was a little less than convinced. However, after evaluating the facts, I could tell that he was telling the truth, so we hired a professional lawyer who could help us through the challenge of fighting the charges. The lawyer worked hard to make things right, and within a few short months, my son was in the clear. Read more about legal problems in this blog.

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How To Choose The Right Bankruptcy For Your Personal Debt Issues

When you do not make enough money to pay your debts, you need to find a reliable solution to your problem. One option is to file bankruptcy, but you need to figure out which type will best suit your needs. Understanding the different aspects of bankruptcy can help you determine which option is the best one for your personal debt issues.

Debts

The first factor to consider with any type of bankruptcy is the type of debt and the amount that you current owe your creditors. In most cases, you will have a combination of secured and unsecured debt that you are having a hard time paying each month.

Secured debt will be items like a mortgage or car loan that the bank can repossess if you do not pay the loan amount each month. Unsecured debt will be personal loans or credit cards that were secured by using your credit score in the first place.

To claim bankruptcy, your monthly income needs to be lower than the amount you need pay on your accumulated debt each month. For example, if your income does not cover the payments for your credit cards, car loan and mortgage, you may qualify for Chapter 7 or Chapter 13 bankruptcy.

Disposable Income

Before you choose a bankruptcy type, you need to figure out the amount of your disposable income that can be used to pay back some of your creditors. Disposable income is money you do not need to pay for your living expenses such as your mortgage, food bill and utilities bills each month. This amount is what you have left over each month to pay for your unsecured debts.

Your disposable income can actually determine the type of bankruptcy you can choose. For example, Chapter 13 requires you to pay your creditors over a three to five year period to help eliminate your debt. However, if your disposable income cannot cover the cost of your repayment plan, then you will need to file for Chapter 7 bankruptcy instead to deal with your debt issues.

Nonexempt Payments

The last factor to consider before you file for bankruptcy is whether you have nonexempt payments. These payments are for debts that the government does not allow you to discharge during a bankruptcy. The most common types of nonexempt payments are alimony, child support and student loans.

On the other hand, you can use bankruptcy to catch up on these debts. By reducing your overall debt amount, you will have an easier time making the payments for items like child support.

When your debt is climbing and your income is limited, it can be a wise decision to file for bankruptcy. To start, you need to learn more about each type of bankruptcy, so you can choose the best option for your situation. Speak with an expert like Wagner Law Office PC for more info.